Economics & Fees
Fee Structure
ROOMS uses a transparent, fair fee structure designed to balance platform sustainability with user profitability:
Protocol Fee: 2% - Platform operations, oracle infrastructure, development, and security
Host Fee: 1% - Room creator reward for market creation
Total Fee: 3% - Deducted from winning payouts only
Economic Model
The ROOMS economic model is designed around three core principles:
User-First - Fees only charged on winnings, not losses. Users never pay fees when they lose.
Sustainability - 2% protocol fee covers infrastructure costs while maintaining competitive rates.
Incentive Alignment - 1% host fee rewards market creators, encouraging quality room creation and market diversity.
How Fees Work
Fees are only charged on winning bets:
You win → 3% fee deducted from your payout
You lose → No fees (you just lose your bet)
This ensures users never pay fees unless they're profitable, making ROOMS accessible to all bettors regardless of size.
Detailed Example
Room Setup:
Room Pool: 100 SOL total
YES Pool: 50 SOL (5 users betting 10 SOL each)
NO Pool: 50 SOL (5 users betting 10 SOL each)
You bet: 10 SOL on YES
Settlement:
YES wins!
Total fees: 50 SOL × 3% = 1.5 SOL
Payout pool: 50 SOL - 1.5 SOL = 48.5 SOL
Your Payout:
Your share: 10 SOL / 50 SOL = 20%
Your payout: 20% × 48.5 SOL = 9.7 SOL
Your profit: 9.7 SOL - 10 SOL = -0.3 SOL
In this example, you lost 0.3 SOL due to fees and pool distribution. If the NO pool had been larger (more people betting against you), your payout would have been higher.
Fee Distribution
Protocol Fee (2%)
The 2% protocol fee funds platform operations:
Infrastructure Costs:
Oracle infrastructure (multi-source aggregation, 3-second polling)
Helius RPC infrastructure (dedicated nodes, high throughput)
Database hosting (PostgreSQL clusters, backups, replication)
Monitoring and alerting systems
Development & Operations:
Platform development and feature additions
Security audits and penetration testing
Bug fixes and maintenance
Customer support infrastructure
Security:
Turnkey HSM key management costs
Security monitoring and threat detection
Compliance and regulatory requirements
Insurance and risk management
Host Fee (1%)
The 1% host fee rewards room creators:
Incentivizes Quality Markets:
Encourages users to create interesting, well-structured markets
Rewards market research and accurate target setting
Promotes engagement and community building
Rewards Active Community:
Top room creators earn substantial passive income
Creates flywheel: more creators → more markets → more users → more fees
Builds sustainable creator economy
Encourages Market Diversity:
Hosts motivated to create markets across different assets
Prevents market concentration in single assets
Ensures variety for all user preferences
Fee Economics
Revenue Model
ROOMS generates revenue through protocol fees:
Volume-Based Revenue:
Revenue = Total betting volume × 2% protocol fee
Scales linearly with platform growth
Predictable and sustainable
Example at Scale:
1,000 active users
Average 10 SOL bet per user per week
Weekly volume: 10,000 SOL
Weekly protocol revenue: 10,000 × 2% = 200 SOL
Annual protocol revenue: 10,400 SOL
Cost Structure
Fixed Costs:
Infrastructure hosting: ~50 SOL/month
Oracle API costs: ~30 SOL/month
Security and compliance: ~20 SOL/month
Total fixed: ~100 SOL/month
Variable Costs:
Scale with transaction volume
Solana network fees: Negligible (~0.000005 SOL per transaction)
Oracle polling costs: Scale with number of active markets
Break-Even Analysis:
Break-even at ~5,000 SOL monthly volume
Profitable at current scale with room for growth
Economies of scale improve margins as volume increases
Fee Comparison
ROOMS offers the most competitive fee structure in prediction markets:
Traditional Betting:
House edge: 5-10% on every bet
Fees charged regardless of win/loss
Additional fees for deposits/withdrawals
Other Prediction Markets:
Polymarket: 2-3% trading fees + gas costs
Augur: 0.5-2% trading fees + gas costs
Kalshi: 5-10% fees on winnings
Average: 5-15% total fees
ROOMS:
3% fee only on winnings
No deposit fees
No withdrawal fees (only network fees ~0.000005 SOL)
No bet placement fees
Most competitive in the industry
Fairness & Transparency
Transparent Fee Structure:
All fees clearly displayed before betting
Fee breakdown shown in room details
Settlement fees visible in transaction history
No hidden costs or surprise fees
Fair Distribution:
Small bettors can still profit (fees only on winnings)
Large bettors pay fair share (proportional to winnings)
Platform remains sustainable (covers costs)
Room creators rewarded (1% host fee)
User Protection:
Fees only charged when you win
No fees on losses
No minimum bet requirements
No withdrawal minimums
Economic Incentives
The fee structure creates aligned incentives:
For Users:
Low fees maximize profitability
Only pay when winning
Transparent and predictable costs
For Room Creators:
1% host fee rewards market creation
Passive income from successful rooms
Incentive to create quality markets
For Platform:
Sustainable revenue model
Scales with growth
Funds continued development
For Ecosystem:
Competitive fees attract users
Quality markets attract bettors
Network effects drive growth
Future Fee Considerations
ROOMS may adjust fees in the future based on:
Market Conditions:
Competitive landscape changes
Infrastructure cost changes
Regulatory requirements
Platform Growth:
Economies of scale may enable fee reductions
Volume-based fee tiers possible
Premium features with additional fees
User Feedback:
Community governance on fee changes
Transparent communication of any changes
30-day notice period for fee adjustments
Any fee changes will be:
Communicated transparently
Implemented with 30-day notice
Justified by cost structure or competitive analysis
Subject to community feedback
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